(Reuters) - Shares of warehouse automation firm Symbotic slumped more than 35% in early trading on Wednesday after the Walmart-backed company delayed the filing of its annual report citing "material weaknesses" in internal control over its financial reporting.
Symbotic said it needed more time to assess the financial impacts of correcting a revenue recognition error and its effects on the fiscal year ended September 28, 2024.
The company, which went public in June 2022, builds and operates robotic warehouse systems for retail giants, including Walmart (NYSE:WMT), Target (NYSE:TGT), Albertsons (NYSE:ACI), and C&S Wholesale.
As of Jan. 2024, Walmart owned a 14.5% stake in Symbotic, according to LSEG data.
Last week, Symbotic restated its quarterly financial statements for fiscal year 2024, saying some of its revenues were recognized earlier than the actual period that they were generated in.
Despite initially promising a timely annual report filing, the company said it had later identified additional errors affecting key metrics such as gross profit and net income.
Symbotic expects the total impact of these corrections to reduce its revenue, gross profit, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by $30 million to $40 million for the year.
The company's shares, having fallen about 27% this year through previous close, were last trading at $24.44. If losses hold, the stock is on track to erase around $7.59 billion from its market value of $21.91 billion
Symbotic has a low free float of just over 86 million shares, or about 15% of outstanding shares, making it susceptible to wild price swings.
The Wilmington, Massachusetts-based firm also cut its forecast for the current quarter - it now expects revenue of $480 million to $500 million, compared with prior expectations of $495 million to $515 million.